Hopeful But Wary: Will Promising Signs For Home Construction Fizzle Once Again?

PLAINVILLE — Home builder Johnny Carrier savors the nail gun's staccato tap-tap as two workers finish piecing together two-by-fours at Samuel's Crossing near the Plainville-Farmington line.

Carpenters hoist up the wall frame for the colonial, one of four houses that Carrier's company is building in the development, all in various stages of construction.

Carrier, watching from behind a stack of framing studs, sees promise this spring in the pace of building. But he wonders if it will last, considering what happened last year.

"It was good out of the gate until April, when it died," Carrier says. "Is it going to continue this year, or are we going to have the same cycle?"

Carrier and other developers in the Hartford area are hopeful but wary, even with the state as a whole coming off its best year in new home construction in five years. The number of housing permits — single-family houses, apartment units and condominiums — jumped by 16 percent last year, compared with 2012.

But most of the increase last year was in Fairfield County, and an analysis of data by The Courant shows that only Fairfield County has returned to the robust residential building levels that the state enjoyed prior to start of the housing downturn in 2007.

The strong showing on the state's Gold Coast last year was dominated by apartments, not single-family houses.

Statewide, overall home construction started out strong this year, but has lost some momentum this spring.

Carrier — whose family-owned home building company, By Carrier Inc., focuses on houses and condominiums — said he expects that his part of the residential construction market will keep making gains, albeit slowly.

"Connecticut will gradually rise to pre-recession levels," Carrier says. "It might take three, four, maybe five years to get there."

Slow To Rebound

Statewide, in 2011, new home construction fell to a low not seen in decades, 2,837 units. Towns and cities issued an encouraging 5,424 housing permits last year. The levels, however, are still below the 9,000 to 10,000 units considered to be a healthy construction market.

Nationally, builder confidence for new, single-family houses cooled in May, with house construction stuck at levels that were half of what would be considered normal.

"Housing is responding much slower than we ever expected," said Ronald F. Van Winkle, an economist and town manager of West Hartford. "We expected housing to provide the bounce. This recovery, there has been no bounce at all."

Home construction is considered a key indicator of recovery after a recession. Demand for new homes rises with buyer confidence in the job market, especially for securing a new job if one is lost. Rising demand creates construction jobs and can ripple out into manufacturing, boosting the need for everything from windows and refrigerators to lawn mowers.

Connecticut's home sale market had gains in the past two years, but an abrupt rise in mortgage rates tempered enthusiasm. The borrowing rates are still historically low, but the swiftness of the jump in rates took potential buyers by surprise.

In Connecticut, slow growth in both employment and population is holding down construction.

"We don't have the population growth because we don't have the job growth," said Chris Nelson, a partner at Landworks Development in Farmington. "People are still a little hesitant to buy."

But Nelson said he was starting to see at least some of the anxiety over buying starting to ease.

Landworks has taken over a former 55-and-over development in Simsbury, aiming to complete the second half of the project's 180 single-family houses. The development began a decade ago, but sales slowed in the housing downturn. Landworks asked the town to lift the age restriction, which Nelson said will broaden the pool of potential buyers.

The houses range from 1,800 to 2,400 square feet, with prices running from about $400,000 to the low $600,000s. The development just began appearing on the Multiple Listing Service in recent weeks, and three potential buyers already have lined up, Nelson said.

"We hope and expect within the next 12 months that we will be closing a couple of units a month," Nelson said. "We haven't been able to say that for many years, since 2007 or 2008."

Interactive Graphic by Stephen Busemeyer / Hartford Courant

Fairfield County Stands Out

The brightest spot in the state's new home construction market is in Fairfield County, where permits for apartment units last year outnumbered single-family houses by a ratio of nearly 2-to-1. There appears there will be little letup in 2014.

In Stamford alone, 2,100 rental units were either approved recently by the city or are now going through the zoning process. Two major projects are downtown and one is on the waterfront, said Robert "Robin" Stein, the city's interim economic development chief.

"Stamford is red-hot for building rental right now," Stein said.

Joseph McGee, vice president of public policy at the Business Council of Fairfield County, said that the close proximity to New York City — and the high-paying jobs there — is a factor. But apartment dwellers in Stamford, for instance, work in diverse locations: The largest number — 50 percent — work in Stamford, followed by 20 percent in Manhattan, with the balance in Westchester County and elsewhere in Connecticut, McGee said, citing a recent survey.

There is no condominium development in Stamford and, at most, a dozen single-family houses under construction.

Apartment building, McGee said, is capitalizing on the broader national trend of young professionals moving back to urban areas, especially where there is close access to train stations. That's true in Stamford, but also in Fairfield, where developers are pursuing apartment proposals near the train station.

Rental construction also is surging in downtown Hartford as the city taps into the national trend of people seeking urban dwellings, and in the surrounding suburbs. But the surge also is a symptom of people putting off home purchases, experts say.

In downtown Stamford, renters are roughly 25 to 35 years old with an average income of $108,000. About 80 percent have college educations, McGee said.

"There is clearly a shift here," McGee said. "But it's not the end of the suburbs. It's just that there is a different group that is very attracted to the city."

Wilman Zhunio frames a house in a Plainville development under construction. (Mark Mirko / Hartford Courant)

Buyer In The Balance

The tentative recovery of single-family house construction is leaving some potential buyers frustrated as they search for a newly built home.

A year ago, Richard King and his wife, Betsy, were looking to move back to Connecticut from upstate New York. The couple had relocated from the state after the Fafnir Bearing Co. plant in New Britain, where Richard King worked as an engineer, was closed in the 1990s.

The Kings, now both retired, were looking to downsize from a 2,650-square-foot, contemporary-style house on 3 acres. They started looking in the Hartford area, mostly at older houses.

"One of the houses we looked at, it was nice," King recalled. "But my wife described it as a festering wound, there was always going to be something to do. The list goes on and on as you look at older homes."

A new home provided an attractive alternative, King said, "but the pickings were pretty slim." On top of that, they were looking in the $300,000 to $400,000 price range, he said.

"If you go to a place like Farmington, Unionville or Avon, you were looking at $600,000 or $700,000," King said.

One weekend, the couple saw a newspaper advertisement for Samuel's Crossing. They drove to Plainville and found Carrier, the developer, willing to customize house designs. For instance, the couple wanted a master bedroom suite on the first floor, anticipating the future when they might not be able to easily manage stairs.

The Kings rented an apartment while their three-bedroom colonial was built. They ended up paying $390,000, and moved into the house in January.

"We've gone through the fixer-upper stage," King said. "We don't want to do that anymore."